This article originally appeared in the Jan./Feb. 2013 issue of CUSTOMER magazine.

In virtually any regulated industry, compliance is at once a legal requirement, a risk management strategy, and an ethical imperative. Healthcare, insurance, finance, and especially accounts receivable management, compliance is a full-time concern. Or at least it should be. If you are a third-party collector for a creditor, for example, chances are good that, at some point, you’ll be audited for recovery performance as well as compliance practices. Moreover, in this era of consumer lawsuits, no company that deals with consumers on a regular basis can be effective if it isn’t fully cognizant of compliance issues.

Here are some critical steps that can help reduce risk both for compliance and security.

Goals for a comprehensive data security program

The primary objective in designing a data security program is to mitigate risks. To that end, first identify the different data types and classify them based on company needs and legal and regulatory frameworks. This approach allows for a straightforward determination of data value, and helps determine protective measures to be implemented, along with associated retention requirements. Thereafter, implementation must be part of a coordinated comprehensive information security program, with adoption and support from the top of the organization.

10 steps to data security

1. Inventory: Know what data you have and where it resides. Label data repositories and data records, and use these labels (maintained in electronic logs) to track individual records along their lifetimes.

2. Research: Understand the laws and regulations that could apply to data, as well as the controls that various regulations require.

-Is encryption of data at rest required?

- How long should this data be retained?

- Is there ongoing litigation that would require retaining this data for a longer period of time?

- What is the value to the business?

-What is the risk level associated with the loss/exposure?

- Is any of this data subject to credit card industry PCI (News - Alert) compliance?

- Is off-site backup of this data needed?

3. Access controls: Identify groups that should have access to data, compare them with people who should have access based on data sensitivity or regulatory requirements, and then correct the gap. To prevent unauthorized access, implement an authorization process during access provisioning, and ensure an expedited access revocation process upon job role changes or terminations. Additional measures should include periodically reviewing the access process, and ensuring that data is made available only on a need-to-know basis.

4. Application security: Review the security of all applications that have access to your data. If applications are built in house, implement a Secure Development Lifecycle process to provide defensive coding practices training, foster code reviews, and perform regular application security assessments. If applications are commercial apps, ensure that vendor notifications on security issues are promptly handled, and that updates and patches are swiftly deployed.

5. Infrastructure security:

-Verify that any external access to data repositories is properly vetted, and that adequate isolation is in place across the network architecture.

- Implement physical access controls where applicable.

- Implement a data disposal program to ensure that magnetic and non-magnetic media is securely wiped before their removal from secure environments.

6. Data retention policies: Define a consistent policy and communicate it across the organization. Avoid complex classifications and keep the number of categories to the minimum required by law, regulations or company needs.

8. The human factor: Conduct background screening as part of your hiring and contracting practices, and provide regular awareness campaigns and training for data security and cyber threats.

9. Audit: Assess regularly the effectiveness of all security measures and apply corrective actions to improve controls over time.

10. Transfer residual risk: If, after applying the previous nine security steps, the residual risk is still not acceptable to the level of risk tolerance of the organization, transfer part of this risk by contracting an insurance policy to cover it.

Information security compliance audits

The best approach here is to answer three high-level questions with regards to information security compliance:

1. What are you trying to accomplish? Begin by clearly defining your requirements.

3. Who or what is driving compliance efforts? Include all stakeholders and influencers. Many times compliance efforts are driven by clients. When that’s the case, take the time to ensure that client requirements are legitimate, and appropriate for your organization.